Citi has launched its first Sustainability-linked Supply Chain Finance (SSCF) programme in Asia Pacific.
Supply Chain Finance (SCF) programms benefit companies and their suppliers as they prioritise their working capital positions respectively. In using Citi's SCF programme, for example, the bank would provide financing to a client's suppliers from the date of collection of specific goods/provision of services to the date on which payment is owed to these suppliers. The cost of this financing is borne by suppliers at a rate lower than their usual cost of funds. As a result, suppliers benefit from cash flow acceleration, quicker payment and improved financing costs.
The programme is also a first for Henkel in Asia Pacific and is targeted at existing or new suppliers who demonstrate strong or improving sustainability performance. Qualifying suppliers can access Citi's supply chain financing at preferential rates on a tiered basis with rates improving as a supplier's sustainability score improves.
Citi’s SSCF programme in Asia Pacific aligns with the bank’s ESG commitments. To help accelerate the transition to a global low-carbon economy, Citi launched its updated Sustainable Progress Strategy in July of last year, which includes its global USD 500 Billion Environmental Finance Goal. Citi also recently established a commitment to USD 1 trillion in sustainable finance by 2030, which includes the environmental finance goal and a USD 500 Billion Social Finance Goal.
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